contestada

Suppose that in the United States, producing an aircraft takes 10,000 hours of labor and producing a shirt takes 2 hours of labor. In China, producing an aircraft takes 40,000 hours of labor, while producing a shirt takes 4 hours of labor.What will these nations trade?A) China will export aircraft, while the United States will export shirts.B) China will export shirts, while the United States will export aircraft.C) Both nations will export shirts.D) There are no gains from trade in this situation.

Respuesta :

Answer: Option(B) is correct.

Explanation:

Correct option: China will export shirts, while the United States will export aircraft.

Yes, these countries do trade with each other. China has a comparatively less absolute disadvantage i.e, comparative advantage in the production of shirts. Whereas on the other hand, United states will export aircraft as it has a comparative advantage in producing it.

Therefore, china will export shirts and United states will exports aircraft.

Otras preguntas